In the last few years, many things have become digital in India. Government’s efforts have played a big role in this. This has been possible due to Digital India, Aadhaar integration, UPI and e-governance.
Also, the growth of the Indian startup ecosystem has brought about a big change in terms of technology in the world of finance, taxation and compliance. Due to this, things are getting done quickly now. The time taken in the process has reduced considerably.
Use of Digital Form 16
This change also includes digital tax filing instead of manual. Digital Form 16 has a big role in this. It is important for every employed taxpayer to understand the importance of Digital Form 16. This will facilitate them in filing Income Tax Return (ITR). The chances of making mistakes in this will be reduced significantly.
Benefits of Digital Form 16
Digital Form 16 is not just a digital copy of the tax certificate. It is a solution that makes income tax compliance very easy for you. Since it is generated by your employer directly from the TRACES portal, the data related to your salary, deductions and TDS is not only correct but also very reliable. It is very helpful in filing income tax returns as there is no fear of data mismatch or incorrect data.
No need to calculate tax
With the main data being digitised, filing taxes becomes much easier. All you have to do is upload the Digital Form 16 on the tax filing platform. The system then instantly pulls the data it needs from it. This includes your salary amount, TDS and deductions under sections 80C and 80D. This means you don’t have to carry a notebook and pen to calculate your taxes.
Helpful in filing ITR yourself
If any data is incorrect, the system immediately informs about it. This gives you a chance to correct the data before submitting the ITR. This is especially beneficial for those who are not experts in tax matters but want to file their income tax returns themselves. The Income Tax Department is constantly trying to simplify the return filing process so that taxpayers can file returns themselves.
Quick processing of returns and refunds
Another big advantage of digital Form 16 is that it makes the processing of returns much faster. Since the information given in it is easily matched with the information of the Income Tax Department, the tax filing platform processes the return quickly. This leads to quick ITR approval and the refund process is also completed quickly. This is beneficial for both taxpayers and the Income Tax Department.
